House File 893 - Introduced HOUSE FILE 893 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO HSB 278) A BILL FOR An Act relating to state taxation and economic development 1 activities, including future tax contingencies, state 2 income tax deductions, tax credits, the state inheritance 3 tax, the sales and use tax, disaster recovery housing, 4 energy infrastructure, telehealth parity, consumer loans, 5 local regulations, and other properly related matters, and 6 including effective date and retroactive applicability 7 provisions. 8 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 9 TLSB 2827HV (1) 89 jm/jh

H.F. 893 DIVISION I 1 FUTURE TAX CHANGES 2 Section 1. 2018 Iowa Acts, chapter 1161, section 133, is 3 amended by striking the section and inserting in lieu thereof 4 the following: 5 SEC. 133. EFFECTIVE DATE. This division of this Act takes 6 effect January 1, 2023. 7 DIVISION II 8 CHILD DEPENDENT AND DEVELOPMENT TAX CREDITS 9 Sec. 2. Section 422.12C, subsection 1, paragraphs f and g, 10 Code 2021, are amended to read as follows: 11 f. For a taxpayer with net income of forty thousand dollars 12 or more but less than forty-five ninety thousand dollars, 13 thirty percent. 14 g. For a taxpayer with net income of forty-five ninety 15 thousand dollars or more, zero percent. 16 Sec. 3. Section 422.12C, subsection 2, paragraph a, Code 17 2021, is amended to read as follows: 18 a. The taxes imposed under this subchapter , less the amounts 19 of nonrefundable credits allowed under this subchapter , may 20 be reduced by an early childhood development tax credit equal 21 to twenty-five percent of the first one thousand dollars 22 which the taxpayer has paid to others for each dependent, as 23 defined in the Internal Revenue Code, ages three through five 24 for early childhood development expenses. In determining the 25 amount of early childhood development expenses for the tax year 26 beginning in the 2006 calendar year only, such expenses paid 27 during November and December of the previous tax year shall 28 be considered paid in the tax year for which the tax credit 29 is claimed. This credit is available to a taxpayer whose net 30 income is less than forty-five ninety thousand dollars. If the 31 early childhood development tax credit is claimed for a tax 32 year, the taxpayer and the taxpayer’s spouse shall not claim 33 the child and dependent care credit under subsection 1 . 34 Sec. 4. RETROACTIVE APPLICABILITY. This division of this 35 -1- LSB 2827HV (1) 89 jm/jh 1/ 55

H.F. 893 Act applies retroactively to tax years beginning on or after 1 January 1, 2021. 2 DIVISION III 3 COVID-19 RELATED GRANTS —— TAXATION 4 Sec. 5. Section 422.7, subsection 62, Code 2021, is amended 5 to read as follows: 6 62. a. Subtract, to the extent included, the amount of 7 any financial assistance qualifying COVID-19 grant provided to 8 an eligible small issued to an individual or business by the 9 economic development authority under the Iowa small business 10 relief grant program created during calendar year 2020 to 11 provide financial assistance to eligible small businesses 12 economically impacted by the COVID-19 pandemic , the Iowa 13 finance authority, or the department of agriculture and land 14 stewardship . 15 b. For purposes of this subsection, “qualifying COVID-19 16 grant” includes any grant identified by the department by rule 17 that was issued under a grant program administered by the 18 economic development authority, Iowa finance authority, or 19 the department of agriculture and land stewardship to provide 20 financial assistance to individuals and businesses economically 21 impacted by the COVID-19 pandemic. 22 c. The economic development authority, Iowa finance 23 authority, or the department of agriculture and land 24 stewardship shall notify the department of any COVID-19 grant 25 program that may qualify under this subsection in the manner 26 and form prescribed by the department. 27 d. This subsection is repealed January 1, 2024, and does not 28 apply to tax years beginning on or after that date. 29 Sec. 6. Section 422.35, subsection 30, Code 2021, is amended 30 to read as follows: 31 30. a. Subtract, to the extent included, the amount of 32 any financial assistance qualifying COVID-19 grant provided 33 to an eligible small issued to a business by the economic 34 development authority under the Iowa small business relief 35 -2- LSB 2827HV (1) 89 jm/jh 2/ 55

H.F. 893 grant program created during calendar year 2020 to provide 1 financial assistance to eligible small businesses economically 2 impacted by the COVID-19 pandemic , the Iowa finance authority, 3 or the department of agriculture and land stewardship . 4 b. For purposes of this subsection, “qualifying COVID-19 5 grant” includes any grant identified by the department by rule 6 that was issued under a grant program administered by the 7 economic development authority, Iowa finance authority, or 8 the department of agriculture and land stewardship to provide 9 financial assistance to businesses economically impacted by the 10 COVID-19 pandemic. 11 c. The economic development authority, Iowa finance 12 authority, or the department of agriculture and land 13 stewardship shall notify the department of any COVID-19 grant 14 program that may qualify under this subsection in the manner 15 and form prescribed by the department. 16 d. This subsection is repealed January 1, 2024, and does not 17 apply to tax years beginning on or after that date. 18 Sec. 7. EFFECTIVE DATE. This division of this Act, being 19 deemed of immediate importance, takes effect upon enactment. 20 Sec. 8. RETROACTIVE APPLICABILITY. This division of this 21 Act applies retroactively to March 23, 2020, for tax years 22 ending on or after that date. 23 DIVISION IV 24 FEDERAL PAYCHECK PROTECTION PROGRAM 25 Sec. 9. FEDERAL PAYCHECK PROTECTION PROGRAM. 26 Notwithstanding any other provision of the law to the contrary, 27 for any tax year ending after March 27, 2020, Division N, Tit. 28 II, subtit. B, §276 and §278(a), of the federal Consolidated 29 Appropriations Act, 2021, Pub. L. No. 116-260, applies in 30 computing net income for state tax purposes under section 422.7 31 or 422.35. 32 Sec. 10. EFFECTIVE DATE. This division of this Act, being 33 deemed of immediate importance, takes effect upon enactment. 34 DIVISION V 35 -3- LSB 2827HV (1) 89 jm/jh 3/ 55

H.F. 893 SCHOOL TUITION ORGANIZATION TAX CREDIT 1 Sec. 11. Section 422.11S, subsection 1, Code 2021, is 2 amended to read as follows: 3 1. a. The taxes imposed under this subchapter , less the 4 credits allowed under section 422.12 , shall be reduced by a 5 school tuition organization tax credit equal to sixty-five 6 percent the following percentage of the amount of the voluntary 7 cash or noncash contributions made by the taxpayer during the 8 applicable tax year to a school tuition organization, subject 9 to the total dollar value of the organization’s tax credit 10 certificates as computed in subsection 8 . : 11 (1) For the tax year beginning on or after January 1, 2021, 12 but before January 1, 2022, sixty-five percent. 13 (2) For the tax year beginning on or after January 1, 2022, 14 but before January 1, 2023, seventy-two percent. 15 (3) For the tax year beginning on or after January 1, 2023, 16 but before January 1, 2024, seventy-eight percent. 17 (4) For the tax year beginning on or after January 1, 2024, 18 but before January 1, 2025, eighty-five percent. 19 (5) For tax years beginning on or after January 1, 2025, 20 eighty-seven percent. 21 b. The tax credit shall be claimed by use of a tax credit 22 certificate as provided in subsection 7 . 23 Sec. 12. Section 422.11S, subsection 8, paragraph a, 24 subparagraph (2), Code 2021, is amended to read as follows: 25 (2) (a) “Total approved tax credits” means for the 2006 26 calendar year, two million five hundred thousand dollars, for 27 the 2007 calendar year, five million dollars, for calendar 28 years beginning on or after January 1, 2008, but before January 29 1, 2012, seven million five hundred thousand dollars, for 30 calendar years beginning on or after January 1, 2012, but 31 before January 1, 2014, eight million seven hundred fifty 32 thousand dollars, for calendar years beginning on or after 33 January 1, 2014, but before January 1, 2019, twelve million 34 dollars, and for calendar years beginning on or after January 35 -4- LSB 2827HV (1) 89 jm/jh 4/ 55

H.F. 893 1, 2019, but before January 1, 2020, thirteen million dollars, 1 and for calendar years beginning on or after January 1, 2020, 2 but before January 1, 2022, fifteen million dollars , for 3 calendar years beginning on or after January 1, 2022, but 4 before January 1, 2023, sixteen million five hundred thousand 5 dollars, for calendar years beginning on or after January 1, 6 2023, but before January 1, 2024, eighteen million dollars, 7 for calendar years beginning on or after January 1, 2024, but 8 before January 1, 2025, nineteen million five hundred thousand 9 dollars, and for calendar years beginning on or after January 10 1, 2025, twenty million dollars . 11 (b) (i) During any calendar year beginning on or after 12 January 1, 2022, if the amount of awarded tax credits from the 13 preceding calendar year are equal to or greater than ninety 14 percent of the total approved tax credits for the current 15 calendar year, the total approved tax credits for the current 16 calendar year shall equal the product of ten percent multiplied 17 by the total approved tax credits for the current calendar year 18 plus the total approved tax credits for the current calendar 19 year. 20 (ii) If total approved tax credits are recomputed pursuant 21 to subparagraph subdivision (i), the total approved tax credits 22 shall equal the previous total approved tax credits recomputed 23 pursuant to subparagraph subdivision (i) for purposes of future 24 recomputations under subparagraph subdivision (i), provided 25 that the maximum total approved tax credits recomputed pursuant 26 to this subparagraph division (b) shall not exceed twenty 27 million dollars in a calendar year. 28 Sec. 13. RETROACTIVE APPLICABILITY. This division of this 29 Act applies retroactively to January 1, 2021, for tax years 30 beginning on or after that date. 31 DIVISION VI 32 TARGETED JOBS WITHHOLDING CREDIT 33 Sec. 14. Section 403.19A, subsection 3, paragraph c, 34 subparagraph (2), Code 2021, is amended to read as follows: 35 -5- LSB 2827HV (1) 89 jm/jh 5/ 55

H.F. 893 (2) The pilot project city and the economic development 1 authority shall not enter into a withholding agreement after 2 June 30, 2021 2026 . 3 DIVISION VII 4 ECONOMIC EMERGENCY FUND —— EXCESS MONEYS 5 Sec. 15. Section 8.55, subsection 2, Code 2021, is amended 6 by striking the subsection and inserting in lieu thereof the 7 following: 8 2. The maximum balance of the fund is the amount equal to 9 two and one-half percent of the adjusted revenue estimate for 10 the fiscal year. If the amount of moneys in the fund exceeds 11 the maximum balance, moneys in excess of the maximum balance 12 shall be distributed as follows: 13 a. An amount equal to not more than five percent of 14 the adjusted revenue estimate for the fiscal year shall be 15 transferred to the general fund of the state. 16 b. The remainder of the excess, if any, shall be transferred 17 to the taxpayer relief fund created in section 8.57E. 18 Sec. 16. EFFECTIVE DATE. This division of this Act takes 19 effect July 1, 2022. 20 DIVISION VIII 21 TAXPAYER RELIEF FUND —— TAX CREDIT 22 Sec. 17. Section 8.57E, subsection 2, Code 2021, is amended 23 to read as follows: 24 2. Moneys in the taxpayer relief fund shall only be used 25 pursuant to appropriations or transfers made by the general 26 assembly for tax relief , including but not limited to increases 27 in the general retirement income exclusion under section 422.7, 28 subsection 31 , or reductions in income tax rates . During 29 each fiscal year beginning on or after July 1, 2021, in which 30 the balance of the taxpayer relief fund equals or exceeds one 31 hundred twenty million dollars, there is transferred from the 32 taxpayer relief fund to the Iowa taxpayer relief tax credit 33 fund created in section 422.12O the entire balance of the 34 taxpayer relief fund to be used for the Iowa taxpayer relief 35 -6- LSB 2827HV (1) 89 jm/jh 6/ 55

H.F. 893 tax credit in accordance with section 422.12O, subsection 5. 1 Sec. 18. Section 257.21, subsection 2, Code 2021, is amended 2 to read as follows: 3 2. The instructional support income surtax shall be imposed 4 on the state individual income tax for the calendar year during 5 which the school’s budget year begins, or for a taxpayer’s 6 fiscal year ending during the second half of that calendar year 7 and after the date the board adopts a resolution to participate 8 in the program or the first half of the succeeding calendar 9 year, and shall be imposed on all individuals residing in the 10 school district on the last day of the applicable tax year. 11 As used in this section , “state individual income tax” means 12 the taxes computed under section 422.5 , less the amounts of 13 nonrefundable credits allowed under chapter 422, subchapter II , 14 except for the Iowa taxpayer relief tax credit allowed under 15 section 422.12O . 16 Sec. 19. NEW SECTION . 422.12O Iowa taxpayer relief tax 17 credit —— fund. 18 1. For purposes of this section, unless the context 19 otherwise requires: 20 a. “Eligible individual” means, with respect to a tax year, 21 an individual who makes and files an individual income tax 22 return pursuant to section 422.13. “Eligible individual” does 23 not include an estate or trust, or an individual for whom an 24 individual income tax return was not timely filed, including 25 extensions. 26 b. “Unclaimed tax credit” means, with respect to a tax 27 year, the aggregate amount by which the Iowa taxpayer relief 28 tax credits that were eligible to be claimed by eligible 29 individuals, if any, exceeds the Iowa taxpayer relief tax 30 credits actually claimed by eligible individuals, if any. 31 2. The taxes imposed under this subchapter, less the credits 32 allowed under this subchapter except the credits for withheld 33 tax and estimated tax paid in section 422.16, shall be reduced 34 by an Iowa taxpayer relief tax credit to an eligible individual 35 -7- LSB 2827HV (1) 89 jm/jh 7/ 55

H.F. 893 for the tax year beginning January 1 immediately preceding July 1 1 of any fiscal year during which a transfer, if any, is made 2 from the taxpayer relief fund in section 8.57E to the Iowa 3 taxpayer relief tax credit fund created in this section. 4 3. The credit shall be equal to the quotient of the amount 5 transferred to the Iowa taxpayer relief tax credit fund in 6 the applicable fiscal year, divided by the number of eligible 7 individuals for the tax year immediately preceding the tax year 8 for which the credit in this section is allowed, as determined 9 by the director of revenue in accordance with this section, 10 rounded down to the nearest whole dollar. The department of 11 revenue shall draft the income tax form for any tax year in 12 which a credit will be allowed under this section to provide 13 the information and space necessary for eligible individuals to 14 claim the credit. 15 4. Any credit in excess of the taxpayer’s liability for the 16 tax year is not refundable and shall not be credited to the tax 17 liability for any following year or carried back to a tax year 18 prior to the tax year in which the taxpayer claims the credit. 19 5. a. There is established within the state treasury 20 under the control of the department an Iowa taxpayer relief 21 tax credit fund consisting of any moneys transferred by the 22 general assembly by law from the taxpayer relief fund created 23 in section 8.57E for purposes of the credit provided in this 24 section. For the fiscal year beginning July 1, 2021, and for 25 each fiscal year thereafter, the department shall transfer from 26 the Iowa taxpayer relief tax credit fund to the general fund 27 of the state, the lesser of the balance of the Iowa taxpayer 28 relief tax credit fund or an amount equal to the Iowa taxpayer 29 relief tax credits claimed in that fiscal year, if any. Any 30 moneys in the Iowa taxpayer relief tax credit fund which 31 represent unclaimed tax credits shall immediately revert to 32 the taxpayer relief fund created in section 8.57E. Interest 33 or earnings on moneys in the Iowa taxpayer relief tax credit 34 fund shall be credited to the taxpayer relief fund created in 35 -8- LSB 2827HV (1) 89 jm/jh 8/ 55

H.F. 893 section 8.57E. 1 b. The moneys transferred to the general fund of the state 2 in accordance with this subsection shall not be considered new 3 revenues for purposes of the state general fund expenditure 4 limitation under section 8.54 but instead as replacement of 5 a like amount included in the expenditure limitation for the 6 fiscal year in which the transfer is made. 7 Sec. 20. Section 422D.2, Code 2021, is amended to read as 8 follows: 9 422D.2 Local income surtax. 10 A county may impose by ordinance a local income surtax as 11 provided in section 422D.1 at the rate set by the board of 12 supervisors, of up to one percent, on the state individual 13 income tax of each individual residing in the county at the 14 end of the individual’s applicable tax year. However, the 15 cumulative total of the percents of income surtax imposed on 16 any taxpayer in the county shall not exceed twenty percent. 17 The reason for imposing the surtax and the amount needed 18 shall be set out in the ordinance. The surtax rate shall be 19 set to raise only the amount needed. For purposes of this 20 section , “state individual income tax” means the tax computed 21 under section 422.5 , less the amounts of nonrefundable credits 22 allowed under chapter 422, subchapter II , except for the Iowa 23 taxpayer relief tax credit allowed under section 422.12O . 24 Sec. 21. EFFECTIVE DATE. This division of this Act, being 25 deemed of immediate importance, takes effect upon enactment. 26 Sec. 22. RETROACTIVE APPLICABILITY. This division of this 27 Act applies retroactively to January 1, 2021, for tax years 28 beginning on or after that date. 29 DIVISION IX 30 STATE INHERITANCE TAX 31 Sec. 23. Section 450.10, Code 2021, is amended by adding the 32 following new subsection: 33 NEW SUBSECTION . 7. a. In lieu of each rate of tax imposed 34 in subsections 1 through 4, for property passing from the 35 -9- LSB 2827HV (1) 89 jm/jh 9/ 55

H.F. 893 estate of a decedent dying on or after July 1, 2021, but before 1 July 1, 2022, there shall be imposed a rate of tax equal to 2 the applicable tax rate in subsections 1 through 4, reduced by 3 ten percent, and rounded to the nearest one-hundredth of one 4 percent. 5 b. In lieu of each rate of tax imposed in subsections 1 6 through 4, for property passing from the estate of a decedent 7 dying on or after July 1, 2022, but before July 1, 2023, there 8 shall be imposed a rate of tax equal to the applicable tax rate 9 in subsections 1 through 4, reduced by twenty percent, and 10 rounded to the nearest one-hundredth of one percent. 11 c. In lieu of each rate of tax imposed in subsections 1 12 through 4, for property passing from the estate of a decedent 13 dying on or after July 1, 2023, but before July 1, 2024, there 14 shall be imposed a rate of tax equal to the applicable tax rate 15 in subsections 1 through 4, reduced by thirty percent, and 16 rounded to the nearest one-hundredth of one percent. 17 d. In lieu of each rate of tax imposed in subsections 1 18 through 4, for property passing from the estate of a decedent 19 dying on or after July 1, 2024, but before July 1, 2025, there 20 shall be imposed a rate of tax equal to the applicable tax 21 rate in subsections 1 through 4, reduced by forty percent, and 22 rounded to the nearest one-hundredth of one percent. 23 e. In lieu of each rate of tax imposed in subsections 1 24 through 4, for property passing from the estate of a decedent 25 dying on or after July 1, 2025, but before July 1, 2026, there 26 shall be imposed a rate of tax equal to the applicable tax 27 rate in subsections 1 through 4, reduced by fifty percent, and 28 rounded to the nearest one-hundredth of one percent. 29 f. In lieu of each rate of tax imposed in subsections 1 30 through 4, for property passing from the estate of a decedent 31 dying on or after July 1, 2026, but before July 1, 2027, there 32 shall be imposed a rate of tax equal to the applicable tax 33 rate in subsections 1 through 4, reduced by sixty percent, and 34 rounded to the nearest one-hundredth of one percent. 35 -10- LSB 2827HV (1) 89 jm/jh 10/ 55

H.F. 893 g. In lieu of each rate of tax imposed in subsections 1 1 through 4, for property passing from the estate of a decedent 2 dying on or after July 1, 2027, but before July 1, 2028, there 3 shall be imposed a rate of tax equal to the applicable tax rate 4 in subsections 1 through 4, reduced by seventy percent, and 5 rounded to the nearest one-hundredth of one percent. 6 h. In lieu of each rate of tax imposed in subsections 1 7 through 4, for property passing from the estate of a decedent 8 dying on or after July 1, 2028, but before July 1, 2029, there 9 shall be imposed a rate of tax equal to the applicable tax rate 10 in subsections 1 through 4, reduced by eighty percent, and 11 rounded to the nearest one-hundredth of one percent. 12 i. In lieu of each rate of tax imposed in subsections 1 13 through 4, for property passing from the estate of a decedent 14 dying on or after July 1, 2029, but before July 1, 2030, there 15 shall be imposed a rate of tax equal to the applicable tax rate 16 in subsections 1 through 4, reduced by ninety percent, and 17 rounded to the nearest one-hundredth of one percent. 18 Sec. 24. NEW SECTION . 450.98 Tax repealed. 19 Effective July 1, 2030, this chapter shall not apply to 20 property of estates of decedents dying on or after July 1, 21 2030. The inheritance tax shall not be imposed under this 22 chapter in the event the decedent dies on or after July 1, 23 2030, and, to this extent, this chapter is repealed. 24 Sec. 25. NEW SECTION . 450B.8 Tax repealed. 25 Effective July 1, 2030, this chapter shall not apply to 26 property of estates of decedents dying on or after July 1, 27 2030. The qualified use inheritance tax shall not be imposed 28 under this chapter in the event the decedent dies on or after 29 July 1, 2030, and, to this extent, this chapter is repealed. 30 Sec. 26. CODE EDITOR DIRECTIVE. The Code editor is directed 31 to remove chapters 450 and 450B from the Code and correct 32 appropriate references to chapters 450 and 450B and appropriate 33 references to the inheritance tax and qualified use inheritance 34 tax effective July 1, 2040. 35 -11- LSB 2827HV (1) 89 jm/jh 11/ 55

H.F. 893 DIVISION X 1 HIGH QUALITY JOBS —— ELIGIBILITY REQUIREMENTS 2 Sec. 27. HIGH QUALITY JOBS —— REDUCTIONS IN OPERATIONS. 3 1. Notwithstanding section 15.329, subsection 1, paragraph 4 “b”, subparagraph (2), the economic development authority shall 5 not presume that a reduction in operations is a reduction in 6 operations while simultaneously applying for assistance with 7 regard to a business that submits an application on or before 8 June 30, 2022, if the business demonstrates to the satisfaction 9 of the authority all of the following: 10 a. That the reduction in operations occurred after March 1, 11 2020. 12 b. That the reduction in operations was caused by the 13 COVID-19 pandemic. 14 2. The economic development authority shall consider 15 whether the benefit of the project proposed by a business 16 under subsection 1 outweighs any negative impact related to 17 the business’s reduction in operations. The business shall 18 remain subject to all other eligibility requirements pursuant 19 to section 15.329. 20 3. This section is repealed July 1, 2022. 21 DIVISION XI 22 HOUSING TRUST FUND 23 Sec. 28. Section 428A.8, subsection 3, Code 2021, is amended 24 to read as follows: 25 3. Notwithstanding subsection 2 , the amount of money that 26 shall be transferred pursuant to this section to the housing 27 trust fund in any one fiscal year shall not exceed three seven 28 million dollars. Any money that otherwise would be transferred 29 pursuant to this section to the housing trust fund in excess 30 of that amount shall be deposited in the general fund of the 31 state. 32 DIVISION XII 33 HIGH QUALITY JOBS PROGRAM —— DAY CARE CENTERS 34 Sec. 29. Section 15.327, Code 2021, is amended by adding the 35 -12- LSB 2827HV (1) 89 jm/jh 12/ 55

H.F. 893 following new subsection: 1 NEW SUBSECTION . 016. “Licensed center” means the same as 2 defined in section 237A.1. 3 Sec. 30. Section 15.329, Code 2021, is amended by adding the 4 following new subsection: 5 NEW SUBSECTION . 3A. In addition to the factors in 6 subsection 3, in determining the eligibility of a business to 7 participate in the program the authority may consider whether a 8 proposed project will provide a licensed center for use by the 9 business’s employees. 10 DIVISION XIII 11 WORKFORCE HOUSING TAX CREDITS 12 Sec. 31. Section 15.119, subsection 2, paragraph g, Code 13 2021, is amended to read as follows: 14 g. The workforce housing tax incentives program administered 15 pursuant to sections 15.351 through 15.356 . In allocating 16 tax credits pursuant to this subsection , the authority shall 17 not allocate more than twenty-five thirty million dollars for 18 purposes of this paragraph. Of the moneys allocated under this 19 paragraph, ten fifteen million dollars shall be reserved for 20 allocation to qualified housing projects in small cities, as 21 defined in section 15.352 , that are registered on or after July 22 1, 2017. 23 DIVISION XIV 24 DISASTER RECOVERY HOUSING ASSISTANCE PROGRAM AND FUND 25 Sec. 32. NEW SECTION . 16.57A Transfer of unobligated or 26 unencumbered funds —— report. 27 1. Notwithstanding any other provision of law to the 28 contrary, the authority may transfer any unobligated and 29 unencumbered moneys in any revolving loan program fund created 30 pursuant to section 16.46, 16.47, 16.48, or 16.49, for deposit 31 in the disaster recovery housing assistance fund created in 32 section 16.57B. 33 2. Notwithstanding section 8.39, and any other law to 34 the contrary, with the prior written consent and approval of 35 -13- LSB 2827HV (1) 89 jm/jh 13/ 55

H.F. 893 the governor, the executive director of the authority may 1 transfer any unobligated and unencumbered moneys in any fund 2 created pursuant to section 16.5, subsection 1, paragraph 3 “s” , for deposit in the disaster recovery housing assistance 4 fund created in section 16.57B. The prior written consent and 5 approval of the director of the department of management shall 6 not be required to transfer the unobligated and unencumbered 7 moneys. 8 3. Notwithstanding section 8.39, and any other law to the 9 contrary, with the prior written approval of the governor, the 10 director of the economic development authority may transfer 11 any unobligated and unencumbered moneys in any fund created 12 pursuant to section 15.106A, subsection 1, paragraph “o” , 13 for deposit in the disaster recovery housing assistance fund 14 created in section 16.57B. 15 4. Any transfer made under this section shall be reported in 16 the same manner as provided in section 8.39, subsection 5. 17 Sec. 33. NEW SECTION . 16.57B Disaster recovery housing 18 assistance program —— fund. 19 1. Definitions. As used in this section, unless the context 20 otherwise requires: 21 a. “ Disaster-affected home” means any of the following: 22 (1) A primary residence that is destroyed or damaged due 23 to a natural disaster that occurs on or after the effective 24 date of this division of this Act, and the primary residence is 25 located in a county that is the subject of a state of disaster 26 emergency proclamation by the governor that authorizes disaster 27 recovery housing assistance. 28 (2) A primary residence that is destroyed or damaged due to 29 a natural disaster that occurred on or after March 12, 2019, 30 but before the effective date of this division of this Act, and 31 is located in a county that has been declared a major disaster 32 by the president of the United States on or after March 12, 33 2019, but before the effective date of this division of this 34 Act, and is located in a county where individuals are eligible 35 -14- LSB 2827HV (1) 89 jm/jh 14/ 55

H.F. 893 for federal individual assistance. 1 b. “Fund” means the disaster recovery housing assistance 2 fund. 3 c. “Local program administrator” means any of the following: 4 (1) The cities of Ames, Cedar Falls, Cedar Rapids, Council 5 Bluffs, Davenport, Des Moines, Dubuque, Iowa City, Waterloo, 6 and West Des Moines. 7 (2) A council of governments whose territory includes at 8 least one county that is the subject of a state of disaster 9 emergency proclamation by the governor that authorizes disaster 10 recovery housing assistance or the eviction prevention program 11 under section 16.57C on or after the effective date of this 12 division of this Act. 13 (3) A community action agency as defined in section 216A.91 14 and whose territory includes at least one county that is the 15 subject of a state of disaster emergency proclamation by the 16 governor that authorizes disaster recovery housing assistance 17 or the eviction prevention program under section 16.57C on or 18 after the effective date of this division of this Act. 19 (4) A qualified local organization or governmental entity 20 as determined by rules adopted by the authority. 21 d. “Program” means the disaster recovery housing assistance 22 program. 23 e. “Replacement housing” means housing purchased 24 by a homeowner or leased by a renter needed to replace 25 a disaster-affected home that is destroyed or damaged 26 beyond reasonable repair as determined by a local program 27 administrator. 28 f. “State of disaster emergency” means the same as described 29 in section 29C.6, subsection 1. 30 2. Fund. 31 a. (1) A disaster recovery housing assistance fund is 32 created within the authority. The moneys in the fund shall be 33 used by the authority for the development and operation of a 34 forgivable loan and grant program for homeowners and renters 35 -15- LSB 2827HV (1) 89 jm/jh 15/ 55

H.F. 893 with disaster-affected homes, and for the eviction prevention 1 program pursuant to section 16.57C. 2 (2) Notwithstanding section 12C.7, subsection 2, interest 3 or earnings on moneys deposited in the fund shall be credited 4 to the fund. Notwithstanding section 8.33, moneys credited to 5 the fund shall not revert at the close of a fiscal year. 6 b. Moneys transferred by the authority for deposit in the 7 fund, moneys appropriated to the fund, and any other moneys 8 available to and obtained or accepted by the authority for 9 placement in the fund shall be deposited in the fund. 10 c. The authority shall not use more than five percent of 11 the moneys in the fund on July 1 of a fiscal year for purposes 12 of administrative costs and other program support during the 13 fiscal year. 14 3. Program. 15 a. The authority shall establish and administer a disaster 16 recovery housing assistance program and shall use moneys in 17 the fund to award forgivable loans to eligible homeowners and 18 grants to eligible renters of disaster-affected homes. Moneys 19 in the fund may be expended following a state of disaster 20 emergency proclamation by the governor pursuant to section 21 29C.6 that authorizes disaster recovery housing assistance. 22 b. The authority may enter into an agreement with one or 23 more local program administrators to administer the program. 24 4. Registration required. To be considered for a forgivable 25 loan or grant under the program, a homeowner or renter must 26 register for the disaster case management program established 27 pursuant to section 29C.20B. The disaster case manager may 28 refer the homeowner or renter to the appropriate local program 29 administrator. 30 5. Homeowners. 31 a. To be eligible for a forgivable loan under the program, 32 all of the following requirements shall apply: 33 (1) The homeowner’s disaster-affected home must have 34 sustained damage greater than the damage that is covered by the 35 -16- LSB 2827HV (1) 89 jm/jh 16/ 55

H.F. 893 homeowner’s property and casualty insurance policy insuring the 1 home plus any other state or federal disaster-related financial 2 assistance that the homeowner is eligible to receive. 3 (2) A local program administrator must either deem the 4 disaster-affected home suitable for rehabilitation or damaged 5 beyond reasonable repair. 6 (3) The disaster-affected home is not eligible for buyout by 7 the county or city where the disaster-affected home is located, 8 or the disaster-affected home is eligible for a buyout by the 9 county or city where the disaster-affected home is located, but 10 the homeowner is requesting a forgivable loan for the repair 11 or rehabilitation of the homeowner’s disaster-affected home in 12 lieu of a buyout. 13 (4) Assistance under the program must not duplicate 14 benefits provided by any local, state, or federal disaster 15 recovery assistance program. 16 b. If a homeowner is referred to the authority or to a 17 local program administrator by the disaster case manager of the 18 homeowner, the authority may award a forgivable loan to the 19 eligible homeowner for any of the following purposes: 20 (1) Repair or rehabilitation of the disaster-affected home. 21 (2) (a) Down payment assistance on the purchase of 22 replacement housing, and the cost of reasonable repairs to be 23 performed on the replacement housing to render the replacement 24 housing decent, safe, sanitary, and in good repair. 25 (b) Replacement housing shall not be located in a 26 one-hundred-year floodplain. 27 (c) For purposes of this subparagraph, “decent, safe, 28 sanitary, and in good repair” means the same as described in 24 29 C.F.R. §5.703. 30 c. The authority shall determine the interest rate for the 31 forgivable loan. 32 d. If a homeowner who has been awarded a forgivable loan 33 sells a disaster-affected home or replacement housing for which 34 the homeowner received the forgivable loan prior to the end 35 -17- LSB 2827HV (1) 89 jm/jh 17/ 55

H.F. 893 of the loan term, the remaining principal on the forgivable 1 loan shall be due and payable pursuant to rules adopted by the 2 authority. 3 6. Renters. 4 a. To be eligible for a grant under the program, all of the 5 following requirements shall apply: 6 (1) A local program administrator either deems 7 the disaster-affected home of the renter suitable for 8 rehabilitation but unsuitable for current short-term 9 habitation, or the disaster-affected home is damaged beyond 10 reasonable repair. 11 (2) Assistance under the program must not duplicate 12 benefits provided by any local, state, or federal disaster 13 recovery assistance program. 14 b. If a renter is referred to the authority or to a local 15 program administrator by the disaster case manager of the 16 renter, the authority may award a grant to the eligible renter 17 to provide short-term financial assistance for the payment of 18 rent for replacement housing. 19 7. Report. On or before January 31 of each year, the 20 authority shall submit a report to the general assembly 21 that identifies all of the following for the calendar year 22 immediately preceding the year of the report: 23 a. The date of each state of disaster emergency proclamation 24 by the governor that authorized disaster recovery housing 25 assistance under this section. 26 b. The total number of forgivable loans and grants awarded. 27 c. The total number of forgivable loans, and the amount of 28 each loan awarded for repair or rehabilitation. 29 d. The total number of forgivable loans, and the amount of 30 each loan, awarded for down payment assistance on the purchase 31 of replacement housing and the cost of reasonable repairs to be 32 performed on the replacement housing to render the replacement 33 housing decent, safe, sanitary, and in good repair. 34 e. The total number of grants, and the amount of each grant, 35 -18- LSB 2827HV (1) 89 jm/jh 18/ 55